RBS launches second DPC to prop up swaps

Boom-era vehicle retooled to guarantee securitisation hedges

Royal Bank of Scotland has set up a new derivatives product company (DPC) to help fix the problems created by the bank's downgrade earlier this year. The boom-era vehicle is designed to guarantee swaps RBS might otherwise have been forced out of.

The DPC, Nevis Derivatives No. 2, gained an A1 rating from Moody's Investors Service on November 27 – three notches above that of the UK bank – and it guarantees RBS's obligations in a long-dated interest rate swap and a basis swap, which were executed